Mortgage approvals hit lowest level since the pandemic
Mortgage approvals for home purchase hit their lowest level since the pandemic in June 2020 during November, the latest Bank of England data has revealed.
Bank of England figures show mortgage approvals for home purchase fell from 57,900 in October to 46,075 during November, in the aftermath of the former chancellor Kwasi Kwarteng’s disastrous mini-Budget.
Net mortgage borrowing rose from £3.6bn to £4.4bn in November, while the typical interest rate increased by 26 basis points during the month to 3.35%, the Bank of England said.
Tom Bill, head of UK residential research at Knight Frank, said:
“In a similar way to the steep monthly price declines seen after the mini-Budget, November’s abrupt drop in mortgage approvals doesn’t tell us a great deal about how the UK housing market will perform in 2023.
“Mortgage rates spiked after the mini-Budget, which many buyers and sellers took as a signal to hold off until after Christmas.
“Rates are edging back down but are still several percentage points higher than they were this time last year.
“Price declines will become more widespread, and sales volumes will come under pressure later this year as more buyers recalculate their financial position but the downwards trajectory will be more gentle than anything seen in the chaotic final quarter of 2022.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added:
“Mortgage approvals are always a good indicator of future direction of travel for the housing market.
“On the ground over the past few months, we have been seeing buyers trying to take advantage of mortgages arranged at lower rates, while others try to come to terms with higher repayments, as evidenced in this survey.
“However, we have noticed many holding back until the early new year to check if mortgage rates really are stabilising before deciding to move.
“The equity-driven are certainly faring better than more-heavily mortgaged first-time buyers, who are also being squeezed by higher rents.”
Kindly shared by Estate Agent Today
Main article photo courtesy of Pixabay
